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Tuesday, March 31, 2009

US Home Prices In Freefall

Source : The Straits Times, March 31, 2009

US Economy

WASHINGTON - US HOME prices in the 20 largest cities fell by a record 19 per cent in January from a year ago in a downward spiral with no end in sight, the Standard & Poor's/Case-Shiller survey showed on Tuesday.

Home prices in 20 major US cities fell at the fastest rate on record in January and are now down a record 19 per cent in the past 12 months. -- PHOTO: AFP

The year-on-year decline was steeper than analysts' consensus forecast of an 18.6 per cent drop, and eclipsed December's record decline of 18.5 per cent.

The monthly survey found continued broad-based declines in the prices of existing single-family homes in the 20 top metropolitan areas.

A separate index of home prices in the 10 largest metropolitan areas also posted a record decline, of 19.4 per cent from January 2008.

The two monthly indices have fallen steadily since October 2007. On a monthly basis, home prices in the top 20 cities were down 2.8 per cent in January, after falling 2.6 per cent in December. In the 10 largest cities, prices fell by 2.5 per cent, after a drop of 2.3 per cent.

'Home prices, which peaked in mid-2006, continued their decline in 2009,' said David Blitzer, head of the index committee at Standard & Poor's.

'There are very few bright spots that one can see in the data. Most of the nation appears to remain on a downward path,' he said.

Average home prices across the US hovered around levels last seen in late 2003. From the peak in the second quarter of 2006, the 10-city index is down 30.2 percent and the 20-city index is down 29.1 per cent.

The three worst-performing cities on an annual basis were the former boom markets of Phoenix, Arizona, down 35.0 percent; Las Vegas (down 32.5 per cent) and San Francisco (down 32.4 per cent).

New York had a relatively soft decline of 9.6 per cent, and Dallas, Texas; Denver, Colorado; and Cleveland, Ohio fared the best, down 4.9 per cent, 5.1 per cent and 5.2 per cent, respectively. -- AFP